Mobile Phones Too Crowded: Nobody Goes There Anymore

More than 3.4 billion people -- nearly half the world's population -- own mobile phones, a Worldwatch Institute study.

MADISON, Wis. — If you are developing a new business plan for the next big thing you're about to spring on the burgeoning mobile phone market, forget about it. File it. Mothball that sucker. Seriously. The mobile phone market is saturated.

"More than 3.4 billion people, nearly half the world's population, own at least one mobile phone," says a recently released study by the Worldwatch Institute, a Washington independent research organization. "As of 2010, more than 90 percent of people worldwide were covered by a mobile phone signal."

This all seems good. Everybody's talking or texting or gaming. But the number of mobile subscriptions paints a whole different picture. It already far surpasses the number of phone owners, according to the Worldwatch Institute. Subscription growth is slowing; annual additions peaked in 2010 at 680 million. "The subscription rate began to dip in 2011, and an estimated 424 million new subscriptions will be added in 2013 -- some 250 million fewer than in 2010."

By "mobile subscriptions," the institute means the number of active accounts with access to a mobile network. Many people have multiple mobile devices or use multiple SIM cards in one phone, so it's understandable that the number of mobile subscriptions is higher than the number of people owning phones. But here's the rub. Mobile subscriptions, which are projected to grow from 1 billion in 2000 to more than 6.8 billion by the end of 2013, is unlikely to increase by a whole lot more in the future.

The International Telecommunication Union expects the number of mobile subscriptions to surpass the world's population in early 2014. That's just a few months from now.

The Worldwatch Institute writes in its report, "The future of the mobile phone industry will be less about adding new subscriptions and more about improving existing service." The most common mobile network in the world still uses 2G technology that allows users to talk and send text messages. Nearly 4.7 billion mobile subscriptions use that technology today.

With so many market research companies producing reports on mobile phones, the fascinating feature in this one is the genuine global view. Instead of the usual horse-race market predictions about who's winning or losing, the Worldwatch Institute offers analysis on mobile phones from the social and economic points of view. Think about this:

Perhaps one of the most important side effects of the growing mobile phone industry in the developing world is that financial services have become tethered to mobile phone use in poor regions. Areas with high poverty tend to have mobile subscription rates of 50 out of 100 people, while only 37 percent of people living there have access to a physical bank branch. Financial institutions have begun to leverage the existing infrastructure for mobile phones so that a host of transactions -- such as opening a savings account, paying bills, or transferring money -- can be conducted at local mobile retail stores.

The report also touched on the environmental effects of mobile phones. People in the United States are believed to replace their phones every two years on average. (Young users probably do so more often.) How many phones get chucked every year? According to the report, 150 million phones were thrown away or recycled in the US alone in 2010.

What happens to old phones?

Old phones, along with other so-called e-waste, are often exported to countries like India and China, where the valuable materials contained in them are extracted in ways that endanger the health of the workers and that pollute the local environment with dangerous toxics. Exposure to the phones’ components can have severe neurological effects, especially on the children who are most often the ones involved in this extraction.

Your next big thing could be in developing apps to devlier financial services on mobile phone in the developing world, or it could be delivering services that deal squarely with old phones. Either way, counting on the fast growth of mobile phones is a strategy whose only future might be on late-night infomercials.

It's sad indeed to see what's happening now in India and China and we've been there before (remember the first industrial revolution!). That said, history tells us that over time, we will get better at recycling. Human beings have always found a way, and mother nature has a very robust way of steering us towards it....

I think so too, Rick. IoT is a disruptive technology that will create new opportunities for many players (silicon, RF, networking, software, apps etc. etc.) What is exciting about it is that it affects us ALL and in a very direct way.

e-waste is a big challenge. It is not so for the mobile as for CRT, coolant, ACs, Desktops and other electronic equipments. Mobiles somehow have a relatively short life cycle so despite the smaller size the amount of waste could be comparable.

There are excellent regular business programmes broadcast by the BBC in the UK and on the BBC World Service. And are, of course, available via the internet:

http://www.bbc.co.uk/podcasts/series/worldbiz/all

I have head a programme about mobile money before. Here is another:

GlobalBiz: Mobile Money in Kenya 20 July 2013

I have not listened to this one, yet, I'm a bit behind on my Podcasts. However, I cannot recommend this programme highly enough, so I should imagine this edition is worth listenning to. (I subscribe via iTunes).

I've watched a couple documentary talking about e-waste. Indeed, not only US but also the other developed countries are shipping e-waste to China and India. To certain extent, it is sad and irresponsible. However, the e-waste are selling with a price. China and India are buying them and recycling them for other purpose. Sadly, the recycling processing is as polluted as the manufacturing process, if not more.

Looking back to 1991 when the first GSM network was launched in Europe, GSM phones in Europe and Asia continued evolving for 10+ years. The iPhone was launched in 2007. The market didn't respond well until iPhone 3 in 2008. Barely over 3 years, the smartphone market has already been saturated. What a short product life cycle!

When a market getting close to saturation, product companies will start creating a niche to stand out from the crowd. All the gadgets, for example, Google Glass, Smartwatch, are created for this purpose. The finger print id from Apple is one of the many features that may make Apple iPhone to be the leader. Not quite yet! I like how the finger print is scanned and how it is being used. However, the limited areas - unlock a phone and Apps store authorizaton - will keep it from thriving.

The saturation of smartphone market is reality. Will it keep ambitious company from entering? When iPhone was launched, mobile phone market was seriously saturated and no one foresaw the data market would take off from mobile. iPhone with the apps store created a niche and they have become the mass market. How will the mobile devices evolve to create another niche?